Waiting, and waiting, and waiting for stimulus money to be spent on something that's actually stimulative

33

CNNMoney published a great update on the much ballyhooed "stimulus" package today.

- Since it was passed ten weeks ago the government has released approximately 10% ($75 billion) of the $787 billion package.

- Of that $75 billion that was made available, only $14.5 billion has been spent so far.

- That means that only 1.8% of the total stimulus money has been spent since the package was passed ten weeks ago.

- But wait, it gets better. $13.2 billion of the $14.5 billion that has actually been spent has been given to states to help with the rising cost of Medicaid.

So basically nearly a quarter after the package that is going to save the economy was passed 0.165% of the allocated money has been spent on anything remotely simulative and that's only speculation about where it actually went. Who knows what they did with it.

Of course, the "Making Work Pay" tax credits have started to kick in. That should help some, but we're talking about $10 per week or something like that and Congress has already indicated that it will not extend it after its scheduled expiration at the end of next year. A miniscule, temporary tax credit is not the solution to our economic problems.

Liz Oxhorn, a press secretary for Vice President Joe Biden is quoted in the article as saying "We're ahead of schedule and making steady progress...We're pleased."

HAHAHAHAHAHAHAHAHAHAH.

I've said it a million times before and I'll say it again. This package stinks and it definitely is not the key to getting us out of this mess. Even if the government had spent as much money as possible as quickly and efficiently as possible, which we all know would never happen under any administration...Democratic or Republican, the velocity of money would still be falling fast enough that we will likely get sucked into a deflationary vortex in the short run.

In a perfect world where we had a nice surplus, like China does, this government spending would probably be better than nothing. In order to have a surplus though you have to actually make something of value rather than just be a voracious consumer.

When we literally have to print and borrow every single dime that is spent, the future tax burden and possible negative impact upon the U.S. dollar might eventually end up being worse than what we would have experienced if this inefficient, pork laden, pet project package had never been passed at all. We're robbing Peter to pay Paul. While the impact of a massive federal deficit might not be felt for several years, there's no such thing as a free lunch. Eventually the chickens are going to come home to roost. Time will tell what is going to happen, but while I don't think that we're all doomed we are going to experience an extended period, several years, of slow to no growth in the U.S.

I'm disappointed that we aren't seeing any infrastructure repair as a result of this bill yet. A sound infrastructure would at least make people feel like this country is moving toward something positive. I must admit, I foolishly kind of expected to see newscasts of workers fixing roads and bridges by now. That sort of stuff shouldn't really require much planning to put into effect, as you are just repairing or replacing something that is already there. It would, however, have kept at least some people busy and helped put a floor on some asset prices.

Man oh man! I did not know that they have only spent $14.5B so far. Those DC pols must be licking their chops with all of that future tax $$ just waiting to be spent. They probably are fighting amongst themselves just to see which piggie project gets funded the most and when.

I agree with you Deej. When that piper gets paid it is going to be very expensive. I see a 2nd recession coming by '11 or '12 this time triggered by double digit inflation and a stalled high (for the US) unemployment rate of about 8%. A return to the 70s anyone with no growth in the DOW for 10 years? Can you imagine a 8000 DOW in '18? I am still seeing predictions for 20000. Yeah right! Oh well, Lynch and Buffett still made plenty of $$. It's just not going to be easy. Might be best to once again focus on the "fallen angels" that returned handsome profits in that era.

Ha I did use a bunch of them now that I go back and look at it, Gus. I basically write whatever pops into my head. I guess that's how I think :). I've always liked colorful sayings like those. The ones that I used don't hold a candle to these:

In the land of the blind, the one-eyed man is king

or

A foolish consistency is the hobgoblin of small minds

or my favorite quote from Einstein:

"Only two things are infinite, the universe and human stupidity, and I'm not sure about the former."